APRA and ASIC have jointly released a comprehensive information package to assist the financial services sector in implementing the Financial Accountability Regime (FAR).
The package includes:
- The joint administration agreement between APRA and ASIC, which sets out the framework within which the regulators will work together to administer the FAR; and
- A joint information paper providing guidance for ADIs on transitioning from the BEAR to the FAR, supported by an accountability statement guidance and template.
The primary goal of the FAR is to improve the risk and governance cultures of APRA-regulated entities within the banking, insurance and superannuation sectors.
Its scope is broad, encompassing authorised deposit-taking institutions (ADIs), insurance companies, superannuation trustees, and licensed non-operating holding companies (NOHCs).
It was developed in response to recommendations from the Hayne royal commission that the Banking Executive Accountability Regime (BEAR) be extended to all APRA-regulated entities.
The FAR will come into force for the banking industry on 15 March 2024 and for the superannuation and insurance industries on 15 March 2025.
It will replace the BEAR, which was established on 1 July 2018 and solely managed by APRA.